Profits down at large UK web design firms

Gap widens between firms making money and those losing it

Market reporting and company analysis firm Plimsoll Publishing has released some sobering facts about the UK web industry, at least relating to the largest firms.

In a press release, Plimsoll discovered a “widening gap between firms making outstanding profits and those losing money”.

Among the UK's top 550 web design companies analysed, the research stated that average profits have fallen across the board to 8.9 per cent of sales. A total of 218 companies were foound to be running at a loss.

The findings, said Plimsoll, would “lead you to believe the industry was suffering with chronic oversupply, rising costs and severe pricing issues,” and yet the same study also revealed 45 of the businesses were making record profits.

Of those ‘rich’ companies, 26 said they were debt-free and the average profit margin was 24.65 per cent. By contrast, of the 218 ‘poor’ companies, 123 were “considered to be a high financial risk", with 93 reporting it was the second loss-making year in a row. On average, they admitted losing three per cent on sales.

“The latest Plimsoll analysis highlights that the industry is being split into two types of company and the gap between the rich and the poor is getting bigger and bigger,” claimed David Pattison, senior analyst at Plimsoll.

“For the companies that are falling behind, they need to re-evaluate their strategy and retain profit in order to improve their financial strength,” he added.